Oil price down on recession fears

Oil prices have halved since July

Oil prices have fallen amid continued fears that demand will sink if the global economy falls into recession.

London Brent crude oil dropped to its lowest level since May last year - it ended down $4.21 at $66.59 a barrel.

As a result of concerns about "deteriorating economic conditions" the oil cartel Opec has brought forward its emergency meeting to 24 October.

Oil prices are about half what they were in July, when US light, sweet crude hit a record of $147 a barrel.

Demand weakens

In New York, oil fell to its lowest level in 14 months. In late afternoon trading it had trimmed some of its earlier losses, but was still down $3.14 at $71.40 a barrel.

"The market is just very worried about a severe international economic downturn," said David Moore at Commonwealth Bank of Australia.

According to Mr Moore, Opec is tipped to cut production at its next meeting.

"They're thinking that oil consumption will be weaker than expected."

On Wednesday, US economic data showed that retail sales fell 1.2% in September, a sign that consumers were tightening their belts.

Also the US central bank's Beige Book report, which reflects the economic conditions, said the economy had showed further signs of contraction, fanning fears that the US economy is already in a recession.

Copper falls

Fear of slowing global economies have also hit commodity and metal prices.

Copper fell almost 8% to its lowest level since January 2006 amid fears a recession would further cut already-weakened demand for industrial metals.

Soaring financing costs and volatile copper prices have already forced some Chinese companies to limit their imports - putting further downward pressure on prices.

Bullion prices also slipped. Gold tumbled more than 5% and silver slid to its weakest level in more than two years.

Elsewhere in the metals markets, platinum, palladium and rhodium prices extended their sharp losses, on worries that demand would plunge.